Week of February 25, 2019

Health of new residential construction

Change in past two years

Change in past two years

Change in past seven years

Change in past seven years
Month New single-family constructor starts New single-family sold
November 2016 60,600 40,000
December 2016 52,900 39,000
January 2017 53,100 45,000
February 2017 58,800 51,000
March 2017 69,500 61,000
April 2017 76,900 56,000
May 2017 76,900 57,000
June 2017 83,800 56,000
July 2017 79,400 48,000
August 2017 78,100 45,000
September 2017 72,500 50,000
October 2017 75,700 49,000
November 2017 69,100 50,000
December 2017 55,100 45,000
January 2018 59,900 48,000
February 2018 62,400 54,000
March 2018 72,500 66,000
April 2018 85,100 61,000
May 2018 88,700 62,000
June 2018 83,500 56,000
July 2018 81,800 52,000
August 2018 80,800 47,000
September 2018 75,000 45,000
October 2018 74,900 42,000
 
Month New single-family constructor starts New single-family sold
2012 Q1 105,500 87,000
2012 Q2 151,100 103,000
2012 Q3 150,100 94,000
2012 Q4 128,600 85,000
2013 Q1 136,100 109,000
2013 Q2 174,100 126,000
2013 Q3 164,900 95,000
2013 Q4 142,600 99,000
2014 Q1 133,800 107,000
2014 Q2 182,600 120,000
2014 Q3 177,600 108,000
2014 Q4 153,800 104,000
2015 Q1 139,900 130,000
2015 Q2 205,400 139,000
2015 Q3 203,200 119,000
2015 Q4 166,100 113,000
2016 Q1 170,400 134,000
2016 Q2 217,700 158,000
2016 Q3 206,500 144,000
2016 Q4 186,900 125,000
2017 Q1 181,400 157,000
2017 Q2 237,600 169,000
2017 Q3 230,000 143,000
2017 Q4 199,900 144,000
2018 Q1 194,800 168,000
2018 Q2 257,300 179,000
2018 Q3 237,600 144,000

These two charts compare the number of new home construction starts with the number of new homes sold.1 The first chart compares them during a two-year period, while the second one reviews the last seven years.

There tends to be a correlation between construction starts and the number of units sold. The number of starts and units sold increases during the spring and then declines during the fall and winter months.

From November 2016 to October 2018, more homes were sold in March 2018 (66,000 single-family units) than any other month. However, by August, the number of units sold dipped below 50,000.

More inventory may soon be available as the gap between construction starts and units sold widens. There were 237,600 construction starts in the third quarter of 2018, while there were 144,000 new single-family homes sold — a gap of 93,600 units. That’s the largest difference between single-family construction starts and units sold in the past seven years. This may lead to a decline in home prices in some markets.

1 Source data: U.S. Census

Data date: 1/21/2019

 

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